and
Ian Ireland
Law and Public Administration Group
The Government has announced a series of measures to tighten administration of the Job Search and Newstart Activity Test. The estimated savings from these measures amount to about $370 million over 1996-97 to 1999-2000.
Until 1991 people receiving unemployment benefit were required to satisfy a work test. They had to be capable of undertaking and willing to undertake suitable work, and to have taken reasonable steps to obtain work. With the introduction of Job Search Allowance (JSA) and Newstart Allowance (NSA) in July 1991 the work test was expanded to include training and education as well as job searching. It was renamed the 'activity test'. This change was part of a shift from 'passive' income support assistance for the unemployed to 'active' assistance that involved increasing their 'job readiness'.
For the vast majority of beneficiaries the activity test has to be passed by undertaking job search activity. They must be actively seeking and willing to undertake suitable paid work. The remainder are involved in training, labour market programs or a range of other activities as a means of passing the activity test.
In assessing whether a person has actively sought suitable work, the Department of Social Security (DSS) looks at what the person has done, or has not done, to find work and assesses whether, in all the circumstances, reasonable steps have been taken to find a job.
Information about job search efforts are provided to DSS each fortnight when recipients fill out and return an application for continued payment. A person must describe to DSS what attempts they have made to find a job, including listing the names and addresses of at least two employers approached per fortnight, either in writing or personally. DSS presently requires that a person take reasonable and independent efforts to get a job, including applying for advertised jobs, approaching potential employers for work and following other possible job prospects.
DSS considers factors such as age, mobility, qualifications, ethnic background, work history, the number and type of job opportunities available and location of a client in determining whether a client has actively sought work. DSS may, after taking into account such factors, determine that a person has taken reasonable steps to obtain work but consider that more positive avenues of employment should be explored and refer them to the CES for counselling.
DSS will generally consider a person to be willing to undertake suitable paid work if they accept a referral from the CES to, or an offer of, suitable employment, even if the person does not subsequently get the job or is unable to start through no fault of their own.
Source: Question No. 3, Weekly Senate Hansard, 23 May 1996.
DSS considers suitable paid work to be work:
DSS does not expect a person to accept a job which involves enlistment in the Defence Force, excessive travelling time or costs, or where no public or private transport is available.
Where the requirements of the activity test are not complied with payment is cancelled and may not be restored until a non-payment period is served. The lengths of the non-payment periods increase with each subsequent breach. The first breach of the test results in a two to six week loss of payment, depending on how long the recipient has been receiving payment. Subsequent breaches are increased by six weeks each time. So the second is a eight to twelve week loss, the third a fourteen to eighteen week loss and so on. If no breach occurs for three years the next non-payment period would revert to two to six weeks. The frequency with which non-payment periods were imposed in 1995 is indicated by the figures in Figure 1. During the nine months April to December 1995 36 514 recipients breached the activity test. During that period there were an average of about 810 000 recipients at any one time.
In a News Release of 15 July 1996, Minister Newman announced that 'From 29 July all new jobseekers will be required to fill in a Job Seeker Diary to record their efforts to find employment as part of the coalition's election commitments to tighten up compliance and to help people into jobs.'
The reporting requirements imposed by the Job Seeker Diary, are in addition to the existing reporting requirements imposed under the activity test. Recipients are required to give full details of the for each job application of :
The Job Seeker Diary must be handed back to the DSS after 12 weeks for a full review (DSS may also at any time ask for the Diary).
Employers do not need to sign Job Seeker diaries.
The Employer Contact Unit which was recently trialed in Tasmania, was extended to a national service from the end of July 1996. It provides feedback from employers on activities of jobseekers to the DSS, and information to employers on Government assistance available to help them employ unemployed people.
Legislative changes intended to result in a broader definition of suitable work, and stricter definitions of sufficient reason for refusing a job offer and voluntary unemployment were announced in the Budget, but very little detail was offered.
Changes to the penalty provisions for breaches of the Activity Test were also announced. The non-payment period for the first breach will be increased to 6 weeks and each subsequent breach will result in a 13 week non-payment period.
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Last updated: 5 December 1996
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